Mr. Oliver puts on his happy face

Joe Oliver has finally announced a budget date — April 21 — but most of the budget news isn’t news anymore, having been pre-announced and priced in last November’s fall fiscal update.

That was November 12, just six months ago — another era. In those halcyon days the Finance department was forecasting the price of oil at $US81 per barrel.

Since then, of course, oil hit a low of $43 before settling in around $50. Every $5 drop in the price of oil costs the federal treasury $1 billion in revenue, so at $30 below the November price, Oliver is looking at a $6 billion shortfall in cash flow.

Never mind the debate about how to allocate a surplus; the question now is how Oliver will even get to the balanced budget his government has promised to deliver.

He announced the budget date at the Canada Goose factory in Toronto — and with 54 seats in the Greater Toronto Area, he’s sure to be back in the neighbourhood again sometime soon. Don’t be surprised if he does the usual new-shoes photo op at a store somewhere in suburban 905, rather than the traditional Ottawa venue.

In the November update, Oliver already reduced the forecast surplus in the current fiscal year from $2.9 billion to $1.9 billion. How can he get there, while factoring a shortfall in revenues that would leave him about $4 billion short of balance?

Easily enough; he can use the $3 billion contingency reserve left to him by Jim Flaherty. The reserve is notionally for emergencies, such as natural disasters. For the Conservatives, of course, the need for a balanced budget going into the October election is an emergency, or at least an article of faith. There isn’t a serious economist who thinks budgetary balance is imperative in a slowing economy — precisely the time when it might be a better policy to prime the pump with stimulus.

If Oliver still needs money to balance the books, he can always sell off Ottawa’s remaining equity stake of about $2 billion in General Motors from the auto bailout of 2009. That would certainly get him to balance.

As for the family tax cut, increased child care benefits, day care cost deductions and child fitness allowances, that $5 billion was already priced into the November numbers.

For the Conservatives the entire retail game is on the doorsteps and driveways of 905 and 519 in southern Ontario, two critical suburban battlegrounds in the coming campaign.

Oliver probably could have done without Bank of Canada Governor Stephen Poloz telling the Financial Times in London that the first quarter of 2015 would see ‘atrocious’ growth … Nor did it pass unnoticed in serious financial precincts on Bay Street.

For example, the universal child care benefit will be increased from $100 to $160 per month for each child under six. Where it was $1,200 per year, it will be $1,920. Call it two grand. And the first seven months’ increase of $420 will come in a single cheque or bank deposit in July. Two million families will receive it.

(And some people wondered why there was no spring election call. Next question.)

The opposition NDP and Liberals may rail against income-splitting as tax breaks for the rich, with just 15 per cent of Canadians in line to receive it. The Conservatives, meanwhile, have branded it as the ‘family tax cut’. And there’s another way of looking at it: It’s two million couples with a dependent under 18 who could split for a benefit of up to $2,000.

Conservatives all say the increased family allowance and tax breaks play very well at the door. And many of them also acknowledge that after months of negative politicking on security/terror issues, they need to get back to a positive message over the two-week Easter recess leading up to the budget.

Meanwhile, Industry Minister James Moore, on an Easter Sunday appearance on CTV, was talking up a “very large scale” injection of infrastructure funding in the budget, with “announcements in every part of the country.”

The question there is whether he’s talking about new money or a re-announcement of the $75 billion in infrastructure spending over 10 years already announced in 2013. Finance is very good at winning arguments with line departments about whether money is ‘new’ or merely re-profiled.

Oliver probably could have done without Bank of Canada Governor Stephen Poloz telling the Financial Times in London that the first quarter of 2015 would see “atrocious” growth in the Canadian economy “because the oil shock is a big deal for us.” The word had scarcely left his lips when it was torqued by the opposition and media as meaning the condition of the economy itself would be “atrocious”. Nor did it pass unnoticed in serious financial precincts on Bay Street.

In a weekly note under the headline ‘Loose Lips Cause Blips’, BMO chief economist Doug Porter noted: “No one expects a central banker to be a head cheerleader for the economy, but head doomster shouldn’t be part of the job. Beyond the ructions to the Governor’s comments in financial markets (they are already pricing in another rate cut), the bigger concern is what such negative remarks can do to broader sentiment. Suffice it to say that network TV and the on-line world were all but declaring the next recession in the wake of the ‘atrocious’ comment …”

Gone are the days when central bankers spoke in the kind of Delphic prose known as ‘fedspeak’ when delivered by Alan Greenspan in the United States. Poloz is a new-age guy who speaks plain English. Speaking of the prospects of economic recovery last year, he said growth of the U.S. economy would be “the cake,” and a devalued Canadian dollar would be “the icing on the cake.” It’s not every day the head of a central bank talks down his own currency.

Former prime minister Paul Martin probably didn’t make Oliver’s weekend either, when he told Evan Solomon on CBC-Radio’s The House that the government’s management of the economy was an “absolute disgrace”. He said stimulus was needed, not budgetary balance. And this from a former finance minister who once famously said he would balance the books “come hell or high water.”

In spite of slower growth — probably less than two per cent this year — Oliver still has a good comparative economic narrative. Canada is the first G7 country to balance the books after the Great Recession, has by far the lowest debt as a percentage of GDP, at only 38 per cent, and has the best job creation record.

That’s Oliver’s story and he’s sticking to it.

L. Ian MacDonald is editor of Policy, the bi-monthly magazine of Canadian politics and public policy. He is the author of five books. He served as chief speechwriter to Prime Minister Brian Mulroney from 1985-88, and later as head of the public affairs division of the Canadian Embassy in Washington from 1992-94.The views, opinions and positions expressed by all iPolitics columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of iPolitics.

The views, opinions and positions expressed by all iPolitics columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of iPolitics.

I think the fix is in and Harper will cheat to win this election, as he did the last election. Don’t forget, Harper has bought up, thousands and thousands of ethnic votes.Harper has sold Canada to Communist China as of, Oct 1/2014. Harper gives our resource jobs to China and other foreign workers.

Our Canadian resource workers, have had their wages knocked way back. Harper wants Canadians to work for $18.00 to $25.00 per hour, to work at the tar sands, Ft. Saint Johns BC and mine jobs are also given to foreigners. It is somewhat difficult, buying a home at the resource job site on $25.00 for a house over $600,000 to several million. Foreigners are usually in work camps and have free transportation and are housed and fed in camps. Canadian resource workers, don’t get those perks.

Then we have food companies stealing from us as well. Harper is the worst fiscal manager in the recorded history of this Nation.

“For example, the universal child care benefit will be increased from
$100 to $160 per month for each child under six. Where it was $1,200 per
year, it will be $1,920. Call it two grand. And the first seven months’
increase of $420 will come in a single cheque or bank deposit in July.
Two million families will receive it.

(And some people wondered why there was no spring election call. Next question.)”
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And Justin and Mulcair will fry in their poutine patate frite oil trying to explain to the parents in Quebec why Harper is wrong or that they would give them even more $$$$$ !!!

Not only will Moms and Dads get out to vote for Harper, they will convince their 18y.o. and plus children who still live at home to vote Conservative or else they will be kicked out !!!! LOL

They just make it up as they go. Media has become too complacent to fact check! It’s now a given on Power and Politics…the CPC are stewards of the economy, they are protectors, they are tough on crime, they are the creators of a police state, war mongers, Israel bible thumpers and environmental enablers. They are knocking on your door selling the Alliance Church ideology. anything for a vote…lies, myths and the CPC policy …”just say it.”

No, Canada does absolutely not have the best job creation record. In fact, Harper’s anemic growth rate record of the economy matches only that of RB Bennett of the 1930’s. One of the many reasons is that Harper eliminated all of the financial shock absorbers that had been built into Canada’s budgetary framework.

Canada has still not balanced its books after the great recession. Not even once. Lastly, Canada has a low percentage of debt to GDP only if you eliminate the Provincial debt. Factoring in the debt for the whole country, you come up with a figure of 87% in terms of a debt load to GDP for Canada as a whole.

Maybe one day ipolitics will stop regurgitating Conservative writers’ Harper fantasies as unchallenged truth. No wonder Canadians believe the things they do about Harper